The Founding Partnership: Wu Jihan vs. Zhan Ketuan
Bitmain's origin story revolves around its controversial co-founders:
- Wu Jihan: Former investment banker who transitioned to Bitcoin mining in 2013
- Zhan Ketuan: Electronics engineer who developed Bitmain's first mining ASIC within six months
Competing Origin Narratives
- Version A: Zhan received 60% equity per initial agreement (later reflected in 2018 IPO filings)
- Version B: Early 2013 records show Zhan held 59.2% from inception, with Wu acquiring shares later
Despite equity disparities, both served as co-CEOs, steering Bitmain through:
✅ 2014 near-bankruptcy during Bitcoin's price crash
✅ 2017 market dominance (60% global share with S9 miner)
✅ 48.2% gross margins at peak profitability
The Strategic Fork: Cryptocurrency vs. AI
2015-2018: Industry Turbulence
Bitcoin Scaling Debate: Blockchain size limitations led to:
- 2017 Bitcoin Cash (BCH) hard fork (8MB blocks)
- 2018 BCH further fragmentation
- Regulatory Headwinds: SEC rejected multiple crypto ETF applications
Diverging Visions Emerged
| Wu Jihan's Focus | Zhan Ketuan's Focus |
|---|---|
| New mining ASICs | AI chip development |
| Bitcoin Cash investment | Deep learning applications |
| Blockchain expansion | "City Brain" smart city projects |
2018: The Turning Point
Market Collapse Impacts
- Bitcoin prices plunged 83% from peak
- Antminer T15 sold at 57% discount
- Q3 2018: Reported $500M loss (CoinDesk)
Corporate Restructuring
- 50% workforce reduction
- Closed international offices
- AI department downsized
Leadership Shakeup
- January 2019: Both co-CEOs reportedly stepped down
- Product director Wang Haichao named successor
- Wu Jihan allegedly marginalized from core operations
2019: Refocusing on Core Business
Strategic Pivot
- BM1397 mining chip launch (February 2019)
English blog announcement emphasizing:
- Crypto market stabilization
- Process optimization
- Return to mining hardware (94.3% of revenue)
AI Ambitions Stalled
- Only one major project since 2018 chip launch (Fuzhou smart city MoU)
- Commercialization challenges in competitive AI space
FAQs: Understanding Bitmain's Journey
❓ What caused Bitmain's 2018 crisis?
Combined effects of Bitcoin price collapse, BCH investment risks, and unsuccessful AI pivot.
❓ Why did the co-CEO structure fail?
Fundamental divergence in strategic vision between cryptocurrency mining and AI development priorities.
❓ What's next for Bitmain?
👉 Explore emerging trends in crypto hardware as the company doubles down on mining ASICs.
❓ How significant was the BCH fork to Bitmain?
The 2017 fork represented both a technical achievement and strategic vulnerability when prices declined.
❓ Can Bitmain regain its dominance?
Current refocusing on core competencies shows promise, but depends on crypto market stability and execution.
❓ What lessons can startups learn?
👉 Strategic focus beats dual-track priorities in volatile tech sectors.
Key Takeaways
- Founder dynamics profoundly shaped Bitmain's trajectory
- Market timing is critical in cryptocurrency ventures
- Strategic focus often trumps diversification in downturns
- Leadership alignment remains essential for scaled operations
This analysis demonstrates how even industry giants face existential crossroads when vision and market realities collide.